Accumulate Axis Bank - Dolat Capital

We believe Axis Bank would be one of the key beneficiaries of expected turnaround in credit cycle. Axis Bank's credit book composition is tilted more towards large corporate and SME, some of these have been under stress last few quarters. Any improvement in business environment would lead to credit demand from these sectors.

- We project Axis Bank's credit book would expand at 20% cagr in FY12-FY14. The bank core operation margin is expected to remain stable at 3.15%-3.20% in FY13-FY14. We also believe core fee income to improve on the back of traction in trade finance and higher processing fees

- At current price, the stock quotes at 2.1x P/ABV FY13E and 1.8x P/ ABV FY14E. Based on our target price of Rs.1,540, the stock would trade at 2.1x ABV FY14E.

Source : Equity Bulls

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